Transneft Considering Second Crude Pipe to Asia as Deficit Looms

OAO Transneft is considering a
second pipeline to Asian markets to counter a capacity deficit
via the East Siberia-Pacific Ocean crude oil channel.

“Today’s agenda includes the issue of building a second
ESPO,” Chief Executive Officer Nikolay Tokarev told journalists
today in Komsomolsk-on-Amur in Russia’s Far East. “I mean one
with the same capacity” as the existing pipeline, he said.

The $22.3 billion ESPO pipeline, Russia’s most expensive
infrastructure project, has helped domestic companies pivot to
energy-hungry Asian markets from Europe, where demand is
stagnant. OAO Rosneft signed this week a preliminary agreement
to sell 200,000 barrels a day to China Petrochemical Corp. for
10 years from 2014, in addition to a 25-year, $270-billion
supply deal it struck in June with China National Petroleum Co.

Transneft, Russia’s oil pipeline monopoly, is alternatively
considering the expansion of the existing ESPO pipeline system,
Tokarev said. The project may boost the capacity of ESPO-1 to
Skovorodino near the border with China to 80 million metric tons
a year from 50 million tons currently, while the ESPO-2 link to
the Pacific port of Kozmino may grow to 50 million tons a year
from 30 million tons now, he said.